Finolex Industries Q4 Results Review - Result In-Line, Margin Improved While Soft Volume: Prabhudas Lilladher

BQ Prime’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer BQ Prime’s subscribers an opportunity to expand their understanding of companies, sectors and the economy. .Finolex Industries delivered decent volume growth slightly below expectations, mainly due to agricultural pipe segment (down about 3% year-on-year, as inventory filling happened in Q3FY23), while plumbing segment volume grew by about 6% year-on-year. The company reported improvement in EBIT/kg to Rs 11/kg in P&F segment with favorable pricing and product mix. We believe Finolex has limited upside from current level as PVC-ECD spread is not favorable towards the company and soft volume growth guidance in agricultural. We downward revised our fiscal 2024, 2025 earnings estimate by -5.8%, -5.9%, respectively and downgrade the rating to ‘Accumulate’ from 'buy' to factor in soft volume growth guidance of 10% in agri. segment for FY24, correction in PVC resin prices to $800/MT which will impact realization, and correction in PVC-EDC spread to $470-480/MT which will impact Ebitda margin.We estimate FY23-25 sales, Ebitda and profit after tax CAGR of 6.1%, 64.8% and 51.1%, respectively, with volume CAGR of 10.5% and Ebitda margin of 16.1%, which is 350 basis points below pre-Covid-19 level. We revise our target price to Rs194 from Rs224 earlier, based on 19 times FY25 earnings per share plus 50% discount to Finolex Cables’ stake. .Click on the attachment to read the full report:.DISCLAIMERThis report is authored by an external party. BQ Prime does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of BQ Prime..Users have no license to copy, modify, or distribute the content without permission of the Original Owner.

Finolex Industries Q4 Results Review - Result In-Line, Margin Improved While Soft Volume: Prabhudas Lilladher

Finolex Industries posted decent volume growth slightly below expectations, mainly due to agricultural pipe segment.

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